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(Alliance News) - Energean Oil & Gas PLC is on track for first gas in Israel, it said on Thursday, as it reported a swing to an interim loss and cut annual production guidance.
Energean is currently developing the Karish Tanin offshore gas field in Israel, and it is on track to deliver first gas from the project in the first quarter of 2021. The asset is also progressing on budget, Energean added.
On the financial front, revenue for the six months to June rose 52% year-on-year to USD40.0 million, with Energean producing 3,920 barrels of oil per day from assets in Greece.
However, Energean has reduced 2019 guidance to 3,400 barrels to 3,600 barrels a day, from 4,300 barrels to 4,800 barrels before. Energean needed to carry out some "heavy lift" operations, which could not safely be done over live platforms, meaning some wells have been shut-in since June while this work is carried out.
Energean has also cut 2019 development and production capital expenditure guidance by USD40 million, to between USD70 million and USD80 million, due to a revised spending programme in Greece.
Energean posted a pretax loss of USD3.1 million from a USD82.1 million profit the year prior, after the non-repeat of a gain on a derivative worth nearly USD100 million.
In July, Energean announced the USD750 million acquisition of Edison Exploration & Production SpA, which includes producing assets in Egypt, Italy, Algeria, the UK, and Croatia, as well as development assets. Energean expects this deal to complete in the last quarter of 2019.
Chief Executive Mathios Rigas said: "We are on track and on budget to deliver first gas from the Karish Tanin development in first quarter 2021 having delivered key milestones in the project, discovered more gas to monetise through the successful Karish North well as well as making good progress elsewhere across the portfolio.
"The Edison transaction announced in July is on track to complete before the end of this year, at which point Energean will become a company of considerable scale in the Mediterranean with pro-forma 2P reserves of 639 million barrels of oil equivalent, weighted 80% towards gas, further enhancing our energy transition strategy."
"With the addition of the Edison portfolio, Energean now has a significant number of new investment opportunities and, as part of the integration process, we are reviewing all capital allocation options to ensure that investment is prioritised towards those projects which offer the highest returns. We look forward to a busy second half to what has so far been a very successful and transformational year at Energean," Rigas continued.
Shares were down 3.8% on Thursday morning in London at 958.30 pence each.
